1. Pam Kelly says she has no faith in budgets. Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to Ms. Kelly’s beliefs?

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Answer 1

Textbook Question

Chapter 15, Problem 1Q

1. Pam Kelly says she has no faith in budgets. Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to Ms. Kelly’s beliefs?

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

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Your boss at LK Enterprises asks you to compute the company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $135,500, accounts receivable were $102,400, and accounts payable were at $121,700. You also see that the company had sales of $356,000 and that cost of goods sold was $298,500. What is your firm's cash conversion cycle? Round to the nearest day.

Answer 2

Textbook Question

Chapter 15, Problem 1Q

1. Pam Kelly says she has no faith in budgets. Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to Ms. Kelly’s beliefs?

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

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Answer 3

Textbook Question

Chapter 15, Problem 1Q

1. Pam Kelly says she has no faith in budgets. Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to Ms. Kelly’s beliefs?

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

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Answer 4

Textbook Question

Chapter 15, Problem 1Q

1. Pam Kelly says she has no faith in budgets. Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to Ms. Kelly’s beliefs?

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

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Answer 5

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Answer 6

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Answer 7

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

Answer 8

Expert Solution & Answer

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Explain the importance of budgets to Person P that makes the employees responsible to control costs.

Answer 12

Explanation of Solution

Budget: Budget is a formal statement of a company’s future plans expressed in monetary terms that are established by the management to fulfill the financial objectives.

Importance of budgets in controlling costs: Budgets are prepared by people to plan the revenue and expenses. But if the budgeting system is not followed by people, the preparation of budgets is a mere paper work. Person P should train the employees to use the budgeting system and make them responsible for the costs under their control.

Answer 13

Ch. 15 - 1. Pam Kelly says she has no faith in budgets. Her...Ch. 15 - 7. What is a responsibility center?Ch. 15 - Prob. 3Q Ch. 15 - Prob. 4Q Ch. 15 - Prob. 5Q Ch. 15 - 3. When are sales and cost variances favorable and...Ch. 15 - 4. Joan Mason, the marketing manager for a large...Ch. 15 - Prob. 8Q Ch. 15 - Prob. 9Q Ch. 15 - Prob. 10Q

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